Tampa Short Sales Information

What is a short sale?

A short sale is when a home owner nets less on the sale of the home than is owed to the lender(s). For instance: A home owner has to sell his home and has a $250,000 loan balance outstanding. The market conditions suggest that the home may only be worth $180,000. At a sale price of $180,000, and adding the costs of selling the home, the owner will face a substantial deficit. The homeowner must attempt to find a buyer and plead a hardship to the lender, asking the lender to forgive the difference owed.

Why would a lender (note holder) allow this?

Banks would rather write off a portion of the amount owed than be faced with the possibilty of taking ownership of the property. Estimates are upwards of $50,000 just for the bank to initiate foreclosure proceedings. The bank will often try to minimize its losses by allowing the owner to sell the home and payoff less than what is owed.

Who qualifies for a short sale?

Homeowners that are behind in payments, or homeowners who will soon be unable to make payments, may qualify to short sell their home. A hardship letter explaining the homeowners' situation will be required by the bank, along with proof of current income (pay stubs), bank statements, recent tax returns, and a financial worksheet detailing income, assets, and liabilities.

What will the lender accept as a payoff?

The lender(s) will have to approve any offer (contract) that the homeowner has signed with a prospective buyer. The lender(s) will consider the offer, weighed against what they could possibly net at a public auction instead. Lenders will order an appraisal or an independent opinion of value to establish an estimated current market value.

Why are short sales so common?

When home values decline, as they have nationwide and especially in Tampa, loan balances on many homes exceed the market value. For instance, anyone who bought a home in Tampa near the peak of the market, and financed the purchase, most likely owes more than the home is worth. Likewise, those who continued to borrow against the accumulated equity in their homes, may now owe more than the home is worth. Consequently, many current listings are short sale listings.

Will we see more short sales?

More than likely. As long as there are plenty of mortgages out there with balances at or above the market value of the property, expect more short sales. As those mortgages are weeded out and/or property values begin to rise, expect short sales to go away. It's all about equity, or lack thereof.

Home Sellers

Need to sell and wondering if you would qualify to short sell your property? Feel free to contact us using the form below. Someone will be in touch with you within 24 hours.

Home Buyers

Are you in the market  for a home in Tampa?  If so, fill out the form below. We will contact you within 24 hours to discuss your plans and how we can assist you.

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